It is important to note that the imposition of a cap on capital allowances for intangible assets only affects the timing of relief in the form of capital allowances and related interest expenses for intangible assets but would not affect the overall quantum of relief. This is because any amounts restricted in one accounting period as a result of a cap would be available for carry forward and utilisation in a subsequent accounting period, subject to the application of the cap in that period. Therefore no additional tax revenue would be raised in the long-term through the Deputy's proposal.
I am advised by Revenue that in the short-term there could be a large theoretical cash-flow gain, tentatively estimated to be in the region of €750m, from the introduction of an 80 per cent cap on intangible assets onshored between 2015 and 11 October 2017. It is important to be clear that such a change would not lead to more tax overall and this simply a timing matter - to present this as additional tax for the exchequer would not be correct. I do not wish to repeat the mistakes of the past by increasing expenditure through unsustainable tax changes. I would also note that this estimate is on the basis of assuming no behavioural change on the part of the companies involved. Furthermore, as the Deputy will be aware, changes to tax law are generally made on a prospective basis such that they apply only from the date on which they have legal effect.
The 80% cap on Capital Allowances for Intangible Assets was re-introduced in Finance Bill 2017 for all assets onshored from 11 October 2017.